UK is unofficially is the first country into stagflation

It is now apparent the BOE has finally been able to accomplish what no country has been able. That is push UK into the grip of stagflation which is sup par growth if any accompanied by rising inflation.UK soon will see real wealth eroding by the day as real growth post inflation slips into negative territory.UK saw its economy growing at 0.2% q/q in Q1 2010, against expectations for a repeat of Q4 2009 of 0.4%. On a year over year basis it is still just in negative territory. The recent two quarters provide tentative evidence that the deepest recession on record for the UK could be coming to an end.UK saw its inflation rate pick up again to 3.4% on an annual basis from 3% in February, and is currently sitting well above the official 2% target.much of the increase is related to the reversal of the drop in the value added (sales) tax which was dropped as the financial crisis set in to help stimulate the economy. The commodity price rebound has also assisted the resurgence of inflation. But even though these are temporary or artificial drivers of inflation, there is the risk that inflation expectations could be impacted and that wage and price negotiations factor in a higher rate, which will require the Bank of England to move on its record monetary policy stimulus measures.Posted in Global